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New York - Facebook shares staged a strong rally on Thursday, buoyed by news of stronger-than-expected profits and sizzling gains in mobile advertising revenue.
The stock was up 14% at $61.01 in the first 20 minutes of trade, a day after the world's biggest social network reported that profit in the fourth quarter jumped eightfold from a year earlier to $523m, raising its net income for the year to $1.5bn.
"Facebook's ascendancy and execution in 2013 has been near-flawless," said Deutsche Bank analyst Ross Sandler in a note to clients.
Mark Mahaney at RBC Capital Markets said he was "more positive" on Facebook after the strong quarterly report.
"The most important Internet trend by far is MOBILE, and Facebook has become a MOBILE company," he wrote in a research note.
Revenues in the past quarter rose to $2.58bn, and $7.87bn for the year. Facebook said the number of monthly active users rose 16% from a year ago to 1.23bn, with 945 million using mobile devices.
Revenue from advertising surged to $2.34bn in the quarter, up 76% over the past year. Mobile advertising revenue represented some 53% of that figure, an increase from 23% in the fourth quarter of 2012.
The surge in revenue from members accessing Facebook from smartphones or tablet computers served as a validation of sorts for founder Mark Zuckerberg and his team.
